When Netflix released data for the final quarter of 2023 on January 23, multiple financial analysis firms, including Morgan Stanley and Bernstein, declared, “There are winners in the streaming wars.” In the last three months of this year, the company added 13 million new subscribers worldwide. This is the second-best quarterly number on record (second only to the number due to the coronavirus pandemic). Throughout 2023, more than 29 million new subscribers were added. That total now stands at 260.28 million people. Revenues increased 12% year over year. The company is the streaming company with the lowest cancellation rate compared to subscription services. In the U.S., it’s just 2%, well below its competitors, which averages 5.3%, according to data from Antenna, a company that tracks subscription services. , was announced in business insider.
Last year, the streaming wars entered a new phase. After 2022, when Netflix’s first subscriber decline gave the platform a whiff of danger, in 2023 Wall Street will be looking at whether these services’ accounts are healthy and profitable businesses. I started. In this new situation, Netflix has emerged as the great winner. There are several reasons why experts have given the company such a title. First, platforms set the pace for online television. It was the first major streaming service to introduce ad-supported subscription plans on a global scale, and by the beginning of this year it already had around 23 million monthly active users. With the removal of the ad-free basic plan and price hikes on other platforms, we expect more and more customers to choose to pay less in exchange for watching a few minutes of ads. This is a widespread business model and is now implemented on most platforms. It was also the first company to take aggressive action against users’ shared accounts outside of their homes, an unpopular move that ultimately paid off. Other companies such as Disney+ are following suit in this regard.
Americans spend more than twice as much time on Netflix than its closest competitor, according to data from Nielsen, a consulting firm that measures U.S. TV viewership. Of the total time Americans spent watching TV in December 2023, Netflix accounted for 7.7%, compared to 3.3% for Prime Video and 1.9% for Disney+ (8.5% for YouTube). . One more thing about Netflix.
content license
Beyond the numbers, there’s another factor that points to Netflix’s dominance over other on-demand TV services.like a series six feet under, band of brothers Or from April, sex in the city, some of the titles that helped establish HBO as a leading name in the field, can also be found on Netflix. In addition, “ta-dum” has signed a contract with Disney, and 14 of his works from the Disney series will be aired. lost, this is us and how i met your mother, also available on Netflix in the United States.and yellowstoneis a popular title from Paramount and has been distributed to some countries outside the US thanks to Netflix. Warner’s deal with Disney is not about exclusivity, so its own digital services will also retain these titles.
Behind this phenomenon is a change in the way we think about content exclusivity, which can be called a return to basics. Netflix first became strong because of licensed content. This business is becoming more established thanks to titles that were previously produced and broadcast by third parties, and the studios (who did this to make up for declining DVD sales and bring their titles to a wider audience). ) benefited both parties. . After a while, these companies realized that their content was feeding a monster that would eventually swallow them whole. When we created our own video-on-demand service, we terminated the license to emphasize exclusivity. In 2017, Disney publicly parted ways with Netflix when it wanted to make it clear it was serious about its streaming efforts. Disney CEO Bob Iger even likened content licensing to “selling nuclear weapons technology to a third world country, and now they’re using it against us.”
In 2023, a new shift in thinking will occur as companies like Warner Bros., Discovery, and Disney realize that exclusivity is a burden and they cannot profit from products that fail on their platforms. Ta. In these contracts, everyone generally benefits. Sellers can reap financial benefits that in some cases help curb their mounting debt, and buyers can be more efficient with their spending and get more new content at once. , After the Hollywood strike, the economic slowdown became noticeable. According to data from What’s On Netflix, a site focused on the platform’s content, Netflix released about 130 fewer original shows in 2023 than in 2022. 16% decrease.
At Netflix, we recognize the positive benefits of this industry shift. One of the company’s CEOs, Ted Sarandos, used the latest earnings release to encourage companies to continue licensing content. “We have a rich history of helping break down some of television’s biggest hits. Breaking Bad and the walking dead.More recently Schitt’s Creek.You can revive shows like suit And I want it to turn into a big pop culture moment.” He added, “I’m excited that studios are becoming more open to licensing again, and I’m also happy to be able to tell them that.” ” he added. [that we] We are open for business. ”
While these agreements are beneficial for both parties, some experts have warned sellers that if their plans with advertising are successful, they will once again become monsters that could start profiting heavily from other people’s content in a few months. They urge people to be careful as they may end up feeding them.Quoting media analyst Jason Bazinet. business insiderdescribes it as follows: Everyone else is losing money. While Netflix does not intend to license its original productions to other companies, all other Hollywood studios license their content to Netflix. ”
Competitor outlook
Not everyone agrees yet on declaring a winner in the streaming wars. And even though Netflix is indeed a winner, the toughest part still lies ahead: maintaining leadership. Prime Video and Disney are perfect rivals to take on.Experts say: bloombergLucas Shaw of Netflix cited sports and children’s programming as weaknesses for Netflix, and pointed out that competitors could take advantage of them. Analysts say Disney is well-positioned with long-standing advantages in these areas, and the revolution it has brought to its Internet TV business by incorporating advertising into Prime Video in the U.S., Canada, the U.K. and Germany. is also emphasized. We offer all subscribers ads by default and the option to pay an additional $3 per month if you don’t want to see ads.
Another concern for Netflix is live streaming of events, and some of its big bets going forward are in that direction. On Saturday, February 24th, Netflix streamed his SAG Awards Gala, the first on the platform. On Sunday, March 3rd, the exhibition match between Rafael Nadal and Carlos Alcaraz will be streamed live. And starting in 2025, the platform will be home to World Wrestling Entertainment’s flagship show. LivingThis will be 52 weeks of live programming in the US and UK. The streaming war may have been won, but there’s still a battle to be fought.
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